The majority of not-for-profit (NFP) entities in Australia access federal tax concessions (income tax exemption, deductible gift recipient status, fringe benefits tax, and goods and services tax concessions). The Commonwealth government is committed to reform of the regulation of the NFP sector and, to that end, has announced a range of significant legislative measures. In this article, the author examines four important proposed reforms which will potentially impact on the vast majority of NFPs that currently access tax concessions. These are a proposal to tax NFPs on income derived from their “commercial activities”, the proposed new statutory authority (the Australian Charities and Not-for-profits Commission), a new legislative definition of “charity”, and amendments in response to the High Court decision in the Word Investments case.

The article highlights what proactive steps NFP entities should take to mitigate potential risks to their continuing entitlement to federal tax concessions as a result of the announced measures.

Author profile:

Dianne Sisak Penjalov CTA

Dianne is a Senior Associate in the business law practice area at Harwood Andrews. Dianne advises on all areas of tax laws, including income tax, capital gains tax and employment taxes. Dianne also has significant experience as a leading advisor to not-for-profit and charitable entities and has presented many seminars, published articles in the Taxation In Australia and other journals, and drafted submissions to Treasury on tax reforms related to the not-for-profit sector.
Dianne has an extensive track record of providing practical and targeted advice on complex tax issues. In previous roles, Dianne was a Senior Associate in the tax group of a national law firm and a taxation officer at the ATO working in the Office of Chief Tax Counsel and Finance and Investment Centre of Expertise. Dianne is also a Member of the Law Institute of Victoria.
Current at 11 September 2015

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